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SAN RAFAEL, Calif., Jan. 18, 2018 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq: WABC), parent company of Westamerica Bank, generated net income for the fourth quarter 2017 of $4.2 million and diluted earnings per common share ("EPS") of $0.16. Fourth quarter 2017 results include adjustments to asset values triggered by enactment of the Tax Cuts and Jobs Act of 2017 which reduced EPS $0.48, recognition of a loss contingency which reduced EPS $0.12, and securities gains which increased EPS $0.18. Fourth quarter 2017 results compare to third quarter 2017 net income of $15.0 million and EPS of $0.57, and to fourth quarter 2016 net income of $14.5 million and EPS of $0.56.

"Fourth quarter 2017 net income benefited from higher net interest income; Westamerica's annualized net interest margin on a fully taxable equivalent basis increased to 3.12 percent in the fourth quarter 2017 from 3.10 percent in the third quarter 2017. The margin is supported by a relatively low cost of funding, which has been steady at 0.04 percent of loans and investments from the fourth quarter of 2016 through the fourth quarter 2017. Asset quality remains very high with nonperforming assets totaling only $7.9 million at December 31, 2017 and net loan losses for the year 2017 were just 0.08 percent of average loan balances," said Chairman, President and CEO David Payne. "After the accounting charges required by the new tax law, Westamerica's capital position remains solid with total capital to assets of 10.7 percent at December 31, 2017 compared to 11.1 percent at September 30, 2017. Westamerica increased its quarterly dividend to $0.40 per common share in the fourth quarter 2017," concluded Payne.

The annualized net interest margin on a fully taxable equivalent basis was 3.12 percent for the fourth quarter 2017, compared to 3.10 percent for the third quarter 2017, and 3.15 percent for the fourth quarter 2016. Net interest income on a fully taxable equivalent basis was $36.6 million for the fourth quarter 2017, compared to $35.7 million for the third quarter 2017, and $36.0 million for the fourth quarter 2016. The annualized funding cost of deposits and other interest-bearing borrowings, as a percentage of average earning assets, was unchanged at 0.04 percent for the fourth quarter 2017, third quarter 2017, and fourth quarter 2016. Checking and savings deposits, which earn relatively low interest rates and are less volatile than time deposits during periods of rising market interest rates, represented 95 percent of average total deposits during the fourth quarter 2017.

The Company recognized no provision for loan losses for the fourth quarter 2017 given stable nonperforming loan volumes and other credit quality attributes. At December 31, 2017, the allowance for loan losses totaled $23.0 million.

Noninterest income for the fourth quarter 2017 totaled $20.3 million, including $8.0 million in securities gains, compared to $12.5 million for the third quarter 2017 and $11.5 million for the fourth quarter 2016. Merchant processing fees were $2.3 million for the fourth quarter 2017, $2.2 million for the third quarter 2017 and $1.7 million for the fourth quarter 2016; the increase is due to successful sales efforts and increased processing volumes.

Noninterest expense for the fourth quarter 2017 totaled $30.2 million, including a $625 thousand impairment of low income housing limited partnership investments due to enactment of the Tax Cuts and Jobs Act of 2017 and a $5.5 million loss contingency accrual. As disclosed in the Company's Form 8-K filed October 19, 2017 and Form 10-Q filed November 3, 2017, the Company has determined that it is obligated to provide refunds of revenue recognized in prior years to some customers; the Company has estimated the probable amount of these obligations and accrued a liability as of December 31, 2017.

The book tax provision on a fully taxable equivalent basis for the fourth quarter 2017 totaled $22.6 million, of which $12.3 million represents the charge to re-measure the Company's net deferred tax asset triggered by enactment of the Tax Cuts and Jobs Act of 2017.

The following appears in accordance with the Private Securities Litigation Reform Act of 1995:

This press release may contain forward-looking statements about the Company, including descriptions of plans or objectives of its management for future operations, products or services, and forecasts of its revenues, earnings or other measures of economic performance. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may."

Forward-looking statements, by their nature, are subject to risks and uncertainties. A number of factors — many of which are beyond the Company's control — could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. The Company's most recent reports filed with the Securities and Exchange Commission, including the annual report for the year ended December 31, 2016 filed on Form 10-K and quarterly report for the quarter ended September 30, 2017 filed on Form 10-Q, describe some of these factors, including certain credit, interest rate, operational, liquidity and market risks associated with the Company's business and operations. Other factors described in these reports include changes in business and economic conditions, competition, fiscal and monetary policies, disintermediation, legislation including the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2011, the Sarbanes-Oxley Act of 2002 and the Gramm-Leach-Bliley Act of 1999, and mergers and acquisitions.

Forward-looking statements speak only as of the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date forward looking statements are made.

Public Information January 18, 2018

WESTAMERICA BANCORPORATION

FINANCIAL HIGHLIGHTS

December 31, 2017

1. Net Income Summary.

(in thousands except per-share amounts)

%

Q4'17

Q4'16

Change

Q3'17

Net Interest and Fee Income (FTE)

$36,644

$35,959

1.9

%

$35,680

Reversal of Provision for Loan Losses

-

-

n/m

-

Noninterest Income

20,300

11,545

75.8

%

12,548

Noninterest Expense

30,167

24,577

22.7

%

24,114

Income Before Taxes (FTE)

26,777

22,927

16.8

%

24,114

Income Tax Provision (FTE)

22,617

8,474

n/m

9,097

Net Income

$4,160

$14,453

-71.2

%

$15,017

Average Common Shares Outstanding

26,384

25,773

2.4

%

26,309

Diluted Average Common Shares

26,538

25,925

2.4

%

26,404

Operating Ratios:

Basic Earnings Per Common Share

$0.16

$0.56

-71.4

%

$0.57

Diluted Earnings Per Common Share

0.16

0.56

-71.4

%

0.57

Return On Assets (a)

0.30

%

1.07

%

1.09

%

Return On Common Equity (a)

2.7

%

10.3

%

9.9

%

Net Interest Margin (FTE) (a)

3.12

%

3.15

%

3.10

%

Efficiency Ratio (FTE)

53.0

%

51.7

%

50.0

%

Dividends Paid Per Common Share

$0.40

$0.39

2.6

%

$0.39

Common Dividend Payout Ratio

250

%

70

%

68

%

%

12/31'17YTD

12/31'16YTD

Change

Net Interest and Fee Income (FTE)

$144,118

$145,077

-0.7

%

Reversal of Provision for Loan Losses

(1,900

)

(3,200

)

n/m

Noninterest Income

56,628

46,574

21.6

%

Noninterest Expense

103,292

101,752

1.5

%

Income Before Taxes (FTE)

99,354

93,099

6.7

%

Income Tax Provision (FTE)

49,329

34,246

44.0

%

Net Income

$50,025

$58,853

-15.0

%

Average Common Shares Outstanding

26,291

25,612

2.7

%

Diluted Average Common Shares

26,419

25,678

2.9

%

Operating Ratios:

Basic Earnings Per Common Share

$1.90

$2.30

-17.4

%

Diluted Earnings Per Common Share

1.89

2.29

-17.5

%

Return On Assets

0.92

%

1.12

%

Return On Common Equity

8.4

%

10.9

%

Net Interest Margin (FTE)

3.12

%

3.24

%

Efficiency Ratio (FTE)

51.5

%

53.1

%

Dividends Paid Per Common Share

$1.57

$1.56

0.6

%

Common Dividend Payout Ratio

83

%

68

%

2. Net Interest Income.

(dollars in thousands)

%

Q4'17

Q4'16

Change

Q3'17

Interest and Fee Income (FTE)

$37,115

$36,459

1.8

%

$36,153

Interest Expense

471

500

-5.8

%

473

Net Interest and Fee Income (FTE)

$36,644

$35,959

1.9

%

$35,680

Average Earning Assets

$4,682,897

$4,561,619

2.7

%

$4,587,848

Average Interest-

Bearing Liabilities

2,701,190

2,681,585

0.7

%

2,687,620

Yield on Earning Assets (FTE) (a)

3.16

%

3.19

%

3.14

%

Cost of Funds (a)

0.04

%

0.04

%

0.04

%

Net Interest Margin (FTE) (a)

3.12

%

3.15

%

3.10

%

Interest Expense/

Interest-Bearing Liabilities (a)

0.07

%

0.07

%

0.07

%

Net Interest Spread (FTE) (a)

3.09

%

3.12

%

3.07

%

%

12/31'17YTD

12/31'16YTD

Change

Interest and Fee Income (FTE)

$146,018

$147,193

-0.8

%

Interest Expense

1,900

2,116

-10.2

%

Net Interest and Fee Income (FTE)

$144,118

$145,077

-0.7

%

Average Earning Assets

$4,622,339

$4,476,755

3.3

%

Average Interest-

Bearing Liabilities

2,696,399

2,624,688

2.7

%

Yield on Earning Assets (FTE)

3.16

%

3.29

%

Cost of Funds

0.04

%

0.05

%

Net Interest Margin (FTE)

3.12

%

3.24

%

Interest Expense/

Interest-Bearing Liabilities

0.07

%

0.08

%

Net Interest Spread (FTE)

3.09

%

3.21

%

3. Loans & Other Earning Assets.

(average volume, dollars in thousands)

%

Q4'17

Q4'16

Change

Q3'17

Total Assets

$5,534,700

$5,370,412

3.1

%

$5,441,612

Total Earning Assets

4,682,897

4,561,619

2.7

%

4,587,848

Total Loans

1,285,748

1,356,350

-5.2

%

1,287,740

Commercial Loans

327,790

349,022

-6.1

%

324,727

Commercial RE Loans

575,984

546,145

5.5

%

566,794

Consumer Loans

381,974

461,183

-17.2

%

396,219

Total Investment Securities

3,397,149

3,205,269

6.0

%

3,300,108

Available For Sale (Market)

2,216,054

1,821,998

21.6

%

2,066,568

Held To Maturity

1,181,095

1,383,271

-14.6

%

1,233,540

Unrealized (Loss) Gain

(3,522

)

(5,571

)

n/m

4,039

Loans/Deposits

26.7

%

28.8

%

27.3

%

%

12/31'17YTD

12/31'16YTD

Change

Total Assets

$5,439,682

$5,246,144

3.7

%

Total Earning Assets

4,622,339

4,476,755

3.3

%

Total Loans

1,315,202

1,424,259

-7.7

%

Commercial Loans

339,234

354,831

-4.4

%

Commercial RE Loans

567,006

590,012

-3.9

%

Consumer Loans

408,962

479,416

-14.7

%

Total Investment Securities

3,307,137

3,052,496

8.3

%

Available For Sale (Market)

2,052,456

1,651,500

24.3

%

Held To Maturity

1,254,681

1,400,996

-10.4

%

Unrealized Loss

(3,522

)

(5,571

)

n/m

Loans/Deposits

27.9

%

31.0

%

4. Deposits, Other Interest-Bearing Liabilities & Equity.

(average volume, dollars in thousands)

%

Q4'17

Q4'16

Change

Q3'17

Total Deposits

$4,811,035

$4,702,129

2.3

%

$4,714,579

Noninterest Demand

2,172,678

2,077,213

4.6

%

2,103,042

Interest Bearing Transaction

899,822

871,947

3.2

%

891,532

Savings

1,501,872

1,492,748

0.6

%

1,475,969

Time greater than $100K

106,746

113,781

-6.2

%

108,673

Time less than $100K

129,917

146,440

-11.3

%

135,363

Total Short-Term Borrowings

62,833

56,669

10.9

%

76,083

Shareholders' Equity

610,200

558,057

9.3

%

599,473

Demand Deposits/

Total Deposits

45.2

%

44.2

%

44.6

%

Transaction & Savings

Deposits / Total Deposits

95.1

%

94.5

%

94.8

%

12/31'17YTD

12/31'16YTD

Change

Total Deposits

$4,722,250

$4,590,351

2.9

%

Noninterest Demand

2,095,522

2,026,939

3.4

%

Interest Bearing Transaction

888,116

862,581

3.0

%

Savings

1,492,725

1,428,059

4.5

%

Time greater than $100K

109,563

118,750

-7.7

%

Time less than $100K

136,324

154,022

-11.5

%

Total Short-Term Borrowings

69,671

61,276

13.7

%

Shareholders' Equity

596,356

542,301

10.0

%

Demand Deposits/

Total Deposits

44.4

%

44.2

%

Transaction & Savings

Deposits / Total Deposits

94.8

%

94.1

%

5. Interest Yields Earned & Rates Paid.

(dollars in thousands)

Q4'17

Average

Income/

Yield (a) /

Volume

Expense

Rate

Interest & Fee Income Earned

Total Earning Assets (FTE)

$4,682,897

$37,115

3.16

%

Total Loans (FTE)

1,285,748

15,671

4.84

%

Commercial Loans (FTE)

327,790

4,168

5.05

%

Commercial RE Loans

575,984

8,009

5.52

%

Consumer Loans

381,974

3,494

3.63

%

Total Investments (FTE)

3,397,149

21,444

2.52

%

Interest Expense Paid

Total Earning Assets

4,682,897

471

0.04

%

Total Interest-Bearing Liabilities

2,701,190

471

0.07

%

Total Interest-Bearing Deposits

2,638,357

461

0.07

%

Interest-Bearing Transaction

899,822

60

0.03

%

Savings

1,501,872

225

0.06

%

Time less than $100K

129,917

75

0.23

%

Time greater than $100K

106,746

101

0.38

%

Total Short-Term Borrowings

62,833

10

0.06

%

Net Interest Income and

Margin (FTE)

$36,644

3.12

%

Q4'16

Average

Income/

Yield (a) /

Volume

Expense

Rate

Interest & Fee Income Earned

Total Earning Assets (FTE)

$4,561,619

$36,459

3.19

%

Total Loans (FTE)

1,356,350

16,526

4.85

%

Commercial Loans (FTE)

349,022

4,084

4.66

%

Commercial RE Loans

546,145

8,386

6.11

%

Consumer Loans

461,183

4,056

3.50

%

Total Investments (FTE)

3,205,269

19,933

2.49

%

Interest Expense Paid

Total Earning Assets

4,561,619

500

0.04

%

Total Interest-Bearing Liabilities

2,681,585

500

0.07

%

Total Interest-Bearing Deposits

2,624,916

491

0.07

%

Interest-Bearing Transaction

871,947

58

0.03

%

Savings

1,492,748

230

0.06

%

Time less than $100K

146,440

90

0.24

%

Time greater than $100K

113,781

113

0.40

%

Total Short-Term Borrowings

56,669

9

0.06

%

Net Interest Income and

Margin (FTE)

$35,959

3.15

%

6. Noninterest Income.

(dollars in thousands except per-share amounts)

%

Q4'17

Q4'16

Change

Q3'17

Service Charges on Deposits

$4,756

$5,064

-6.1

%

$4,989

Merchant Processing Services

2,346

1,678

39.8

%

2,153

Debit Card Fees

1,569

1,566

0.2

%

1,784

Other Service Fees

620

620

0.1

%

652

ATM Processing Fees

696

551

26.4

%

684

Trust Fees

739

682

8.4

%

718

Financial Services Commissions

155

157

-1.4

%

148

Securities Gains

7,955

-

n/m

-

Other Income

1,464

1,227

19.3

%

1,420

Total Noninterest Income

$20,300

$11,545

75.8

%

$12,548

Total Revenue (FTE)

$56,944

$47,504

19.9

%

$48,228

Noninterest Income/Revenue (FTE)

35.6

%

24.3

%

26.0

%

Service Charges/Avg. Deposits (a)

0.39

%

0.43

%

0.42

%

Total Revenues (FTE) Per Avg.

Common Share (a)

$8.56

$7.33

16.8

%

$7.27

%

12/31'17YTD

12/31'16YTD

Change

Service Charges on Deposits

$19,612

$20,854

-6.0

%

Merchant Processing Services

8,426

6,377

32.1

%

Debit Card Fees

6,421

6,290

2.1

%

Other Service Fees

2,584

2,571

0.5

%

ATM Processing Fees

2,610

2,411

8.2

%

Trust Fees

2,875

2,686

7.0

%

Financial Services Commissions

639

568

12.6

%

Securities Gains

7,955

-

n/m

Other Income

5,506

4,817

14.3

%

Total Noninterest Income

$56,628

$46,574

21.6

%

Total Revenue (FTE)

$200,746

$191,651

4.7

%

Noninterest Income/Revenue (FTE)

28.2

%

24.3

%

Service Charges/Avg. Deposits

0.42

%

0.45

%

Total Revenues (FTE) Per Avg.

Common Share

$7.64

$7.48

2.0

%

7. Noninterest Expense.

(dollars in thousands)

%

Q4'17

Q4'16

Change

Q3'17

Salaries & Benefits

$12,652

$12,439

1.7

%

$12,816

Loss Contingency (2)

5,542

3

n/m

-

Occupancy and Equipment

4,860

4,860

0.0

%

4,907

Outsourced Data Processing

2,325

2,131

9.1

%

2,383

Amortization of

Identifiable Intangibles

755

863

-12.4

%

760

Professional Fees

627

797

-21.3

%

512

Impairment of Tax Credit Investments

625

-

n/m

-

Courier Service

423

494

-14.4

%

451

Other Operating

2,358

2,990

-21.2

%

2,285

Total Noninterest Expense

$30,167

$24,577

22.7

%

$24,114

Noninterest Expense/

Avg. Earning Assets (a)

2.56

%

2.14

%

2.09

%

Noninterest Expense/Revenues (FTE)

53.0

%

51.7

%

50.0

%

%

12/31'17YTD

12/31'16YTD

Change

Salaries & Benefits

$51,519

$51,507

0.0

%

Loss Contingency (2)

5,542

3

n/m

Occupancy and Equipment

19,430

19,017

2.2

%

Outsourced Data Processing

9,035

8,505

6.2

%

Amortization of

Identifiable Intangibles

3,077

3,504

-12.2

%

Professional Fees

2,161

3,980

-45.7

%

Impairment of Tax Credit Investments

625

-

n/m

Courier Service

1,732

1,952

-11.3

%

Other Operating

10,171

13,284

-23.4

%

Total Noninterest Expense

$103,292

$101,752

1.5

%

Noninterest Expense/

Avg. Earning Assets

2.23

%

2.27

%

Noninterest Expense/Revenues (FTE)

51.5

%

53.1

%

8. Allowance for Loan Losses.

(dollars in thousands)

%

Q4'17

Q4'16

Change

Q3'17

Average Total Loans

$1,285,748

$1,356,350

-5.2

%

$1,287,740

Allowance for Loan Loss (ALL)

Beginning of Period

$23,628

$26,359

-10.4

%

$24,103

Reversal of Provision for Loan Losses

-

-

n/m

-

Net ALL Losses

(619

)

(405

)

n/m

(475

)

ALL End of Period

$23,009

$25,954

-11.3

%

$23,628

ALL Recoveries/Gross ALL Losses

47

%

66

%

53

%

Net ALL Losses /Avg. Total Loans (a)

0.19

%

0.12

%

0.15

%

%

12/31'17YTD

12/31'16YTD

Change

Average Total Loans

$1,315,202

$1,424,259

-7.7

%

Allowance for Loan Loss (ALL)

Beginning of Period

$25,954

$29,771

-12.8

%

Reversal of Provision for Loan Losses

(1,900

)

(3,200

)

n/m

Net ALL Losses

(1,045

)

(617

)

n/m

ALL End of Period

$23,009

$25,954

-11.3

%

ALL Recoveries/Gross ALL Losses

82

%

91

%

Net ALL Losses /Avg. Total Loans

0.08

%

0.04

%

9. Credit Quality.

(dollars in thousands)

%

12/31/17

12/31/16

Change

9/30/17

Nonperforming Loans (1):

Nonperforming Nonaccrual

$1,641

$3,956

-58.5

%

$1,498

Performing Nonaccrual

4,285

4,429

-3.2

%

4,285

Total Nonaccrual Loans

5,926

8,385

-29.3

%

5,783

90+ Days Past Due Accruing Loans

531

497

6.8

%

434

Total

6,457

8,882

-27.3

%

6,217

Repossessed Loan Collateral (1)

1,426

3,095

-53.9

%

1,426

Total Nonperforming Assets (1)

$7,883

$11,977

-34.2

%

$7,643

Total Loans Outstanding

$1,287,982

$1,352,711

-4.8

%

$1,284,782

Total Assets

$5,513,046

$5,366,083

2.7

%

$5,445,808

Loans:

Allowance for Loan Losses

$23,009

$25,954

-11.3

%

$23,628

Allowance/Loans

1.79

%

1.92

%

1.84

%

Nonperforming Loans/Total Loans

0.50

%

0.66

%

0.48

%

10. Capital.

(in thousands, except per-share amounts)

%

12/31/17

12/31/16

Change

9/30/17

Shareholders' Equity

$590,239

$561,367

5.1

%

$603,957

Total Assets

5,513,046

5,366,083

2.7

%

5,445,808

Shareholders' Equity/

Total Assets

10.71

%

10.46

%

11.09

%

Shareholders' Equity/

Total Loans

45.83

%

41.50

%

47.01

%

Tangible Common Equity Ratio

8.63

%

8.26

%

8.98

%

Common Shares Outstanding

26,425

25,907

2.0

%

26,319

Common Equity Per Share

$22.34

$21.67

3.1

%

$22.95

Market Value Per Common Share

$59.55

$62.93

-5.4

%

$59.54

Share Repurchase Programs

(shares in thousands)

%

Q4'17

Q4'16

Change

Q3'17

Total Shares Repurchased

-

-

n/m

-

Average Repurchase Price

$-

$-

n/m

$-

Net Shares Issued

(106

)

(242

)

n/m

(15

)

%

12/31'17YTD

12/31'16YTD

Change

Total Shares Repurchased

6

137

n/m

Average Repurchase Price

$56.51

$41.94

n/m

Net Shares Issued

(518

)

(379

)

n/m

11. Period-End Balance Sheets.

(unaudited, dollars in thousands)

%

12/31/17

12/31/16

Change

9/30/17

Assets:

Cash and Due from Banks

$575,002

$462,271

24.4

%

$561,757

Investment Securities:

Available For Sale

2,193,507

1,890,758

16.0

%

2,090,477

Held to Maturity

1,158,864

1,346,312

-13.9

%

1,204,240

Loans

1,287,982

1,352,711

-4.8

%

1,284,782

Allowance For Loan Losses

(23,009

)

(25,954

)

-11.3

%

(23,628

)

Total Loans, net

1,264,973

1,326,757

-4.7

%

1,261,154

Other Real Estate Owned

1,426

3,095

-53.9

%

1,426

Premises and Equipment, net

35,301

36,566

-3.5

%

35,507

Identifiable Intangibles, net

3,850

6,927

-44.4

%

4,605

Goodwill

121,673

121,673

0.0

%

121,673

Other Assets

158,450

171,724

-7.7

%

164,969

Total Assets

$5,513,046

$5,366,083

2.7

%

$5,445,808

Liabilities and Shareholders' Equity:

Deposits:

Noninterest Bearing

$2,197,526

$2,089,443

5.2

%

$2,128,342

Interest-Bearing Transaction

904,245

865,701

4.5

%

873,145

Savings

1,494,024

1,493,427

0.0

%

1,491,168

Time

231,818

256,170

-9.5

%

241,925

Total Deposits

4,827,613

4,704,741

2.6

%

4,734,580

Short-Term Borrowed Funds

58,471

59,078

-1.0

%

66,337

Other Liabilities

36,723

40,897

-10.2

%

40,934

Total Liabilities

4,922,807

4,804,716

2.5

%

4,841,851

Shareholders' Equity:

Common Equity:

Paid-In Capital

433,267

406,139

6.7

%

427,188

Accumulated Other

Comprehensive Loss

(16,832

)

(10,074

)

n/m

(3,433

)

Retained Earnings

173,804

165,302

5.1

%

180,202

Total Shareholders' Equity

590,239

561,367

5.1

%

603,957

Total Liabilities and

Shareholders' Equity

$5,513,046

$5,366,083

2.7

%

$5,445,808

12. Income Statements.

(unaudited, in thousands except per-share amounts)

%

Q4'17

Q4'16

Change

Q3'17

Interest & Fee Income:

Loans

$15,410

$16,235

-5.1

%

$15,082

Investment Securities:

Available for Sale

12,359

9,422

31.2

%

11,347

Held to Maturity

6,435

7,552

-14.8

%

6,716

Total Interest & Fee Income

34,204

33,209

3.0

%

33,145

Interest Expense:

Transaction Deposits

60

58

3.1

%

60

Savings Deposits

225

230

-2.3

%

220

Time Deposits

176

203

-13.1

%

181

Short-Term Borrowed Funds

10

9

13.6

%

12

Total Interest Expense

471

500

-5.8

%

473

Net Interest Income

33,733

32,709

3.1

%

32,672

Reversal of Provision for Loan Losses

-

-

n/m

-

Noninterest Income:

Service Charges

4,756

5,064

-6.1

%

4,989

Merchant Processing Services

2,346

1,678

39.8

%

2,153

Debit Card Fees

1,569

1,566

0.2

%

1,784

Other Service Fees

620

620

0.1

%

652

ATM Processing Fees

696

551

26.4

%

684

Trust Fees

739

682

8.4

%

718

Financial Services Commissions

155

157

-1.4

%

148

Securities Gains

7,955

-

n/m

-

Other

1,464

1,227

19.3

%

1,420

Total Noninterest Income

20,300

11,545

75.8

%

12,548

Noninterest Expense:

Salaries andBenefits

12,652

12,439

1.7

%

12,816

Loss Contingency (2)

5,542

3

n/m

-

Occupancy and Equipment

4,860

4,860

0.0

%

4,907

Outsourced Data Processing

2,325

2,131

9.1

%

2,383

Amortization of Identifiable Intangibles

755

863

-12.4

%

760

Professional Fees

627

797

-21.3

%

512

Impairment of Tax Credit Investments

625

-

n/m

-

Courier Service

423

494

-14.4

%

451

Other

2,358

2,990

-21.2

%

2,285

Total Noninterest Expense

30,167

24,577

22.7

%

24,114

Income Before Income Taxes

23,866

19,677

21.3

%

21,106

Income Tax Provision

19,706

5,224

n/m

6,089

Net Income

$4,160

$14,453

-71.2

%

$15,017

Average Common Shares Outstanding

26,384

25,773

2.4

%

26,309

Diluted Common Shares Outstanding

26,538

25,925

2.4

%

26,404

Per Common Share Data:

Basic Earnings

$0.16

$0.56

-71.4

%

$0.57

Diluted Earnings

0.16

0.56

-71.4

%

0.57

Dividends Paid

0.40

0.39

2.6

%

0.39

%

12/31'17YTD

12/31'16YTD

Change

Interest & Fee Income:

Loans

$61,740

$69,139

-10.7

%

Investment Securities:

Available for Sale

44,664

34,276

30.3

%

Held to Maturity

27,432

30,636

-10.5

%

Total Interest & Fee Income

133,836

134,051

-0.2

%

Interest Expense:

Transaction Deposits

233

259

-10.0

%

Savings Deposits

890

907

-1.8

%

Time Deposits

733

911

-19.6

%

Short-Term Borrowed Funds

44

39

12.5

%

Total Interest Expense

1,900

2,116

-10.2

%

Net Interest Income

131,936

131,935

0.0

%

Reversal of Provision for Loan Losses

(1,900

)

(3,200

)

n/m

Noninterest Income:

Service Charges

19,612

20,854

-6.0

%

Merchant Processing Services

8,426

6,377

32.1

%

Debit Card Fees

6,421

6,290

2.1

%

Other Service Fees

2,584

2,571

0.5

%

ATM Processing Fees

2,610

2,411

8.2

%

Trust Fees

2,875

2,686

7.0

%

Financial Services Commissions

639

568

12.6

%

Securities Gains

7,955

-

n/m

Other

5,506

4,817

14.3

%

Total Noninterest Income

56,628

46,574

21.6

%

Noninterest Expense:

Salaries andBenefits

51,519

51,507

0.0

%

Loss Contingency (2)

5,542

3

n/m

Occupancy and Equipment

19,430

19,017

2.2

%

Outsourced Data Processing

9,035

8,505

6.2

%

Amortization of Identifiable Intangibles

3,077

3,504

-12.2

%

Professional Fees

2,161

3,980

-45.7

%

Impairment of Tax Credit Investments

625

-

n/m

Courier Service

1,732

1,952

-11.3

%

Other

10,171

13,284

-23.4

%

Total Noninterest Expense

103,292

101,752

1.5

%

Income Before Income Taxes

87,172

79,957

9.0

%

Income Tax Provision

37,147

21,104

76.0

%

Net Income

$50,025

$58,853

-15.0

%

Average Common Shares Outstanding

26,291

25,612

2.7

%

Diluted Common Shares Outstanding

26,419

25,678

2.9

%

Per Common Share Data:

Basic Earnings

$1.90

$2.30

-17.4

%

Diluted Earnings

1.89

2.29

-17.5

%

Dividends Paid

1.57

1.56

0.6

%

Footnotes and Abbreviations:

(FTE) Fully Taxable Equivalent. The Company presents its net interest margin and net interest income on a FTE basis using the current statutory federal tax rate.Management believes the FTE basis is valuable to the reader because the Company's loan and investment securities portfolios contain a relatively large portion of municipal loans and securities that are federally tax exempt.The Company's tax exempt loans and securities composition may not be similar to that of other banks, therefore in order to reflect the impact of the federally tax exempt loans and securities on the net interest margin and net interest income for comparability with other banks, the Company presents its net interest margin and net interest income on a FTE basis.

(a) Annualized

(1) All originated and purchased non performing loans and repossessed loan collateral have been combined as of Q1 '17.Prior period presentation has been updated, accordingly.

(2) Represents the Company's estimated refunds to customers of revenue recognized in prior years.